9 important tax nuances that married couples should know

Marriage changes the way in which tax returns are filed, and not always in favor of taxpayers. But depending on whether you file the declaration jointly or separately, you can also take advantage of the benefits available for married couples.

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Edition GO Banking Rates collected tax tips for couples on how to make their tax returns correct and effective.

1. Understand Standard Deduction

Married taxpayers have three possible statuses for filing declarations:

• joint submission;
• separate feed;
• filing one of the pair in the status of the head of the family.

The standard tax deduction depends on which filing status you use. For a couple filing jointly for 2018, the deduction will be $24; if filing separately, the deduction will be $000. Filing jointly may be a good choice even if one spouse is not working because the IRS provides some tax benefits for married couples filing jointly, and those benefits are not available to those who file their taxes individually.

However, even if the joint filing of the declaration was your best choice in the past, do not think that it will always be so. Perform calculations every year to determine which form of filing the declaration will give you the most favorable result. Changes to your personal circumstances or new tax laws may make other filing status more desirable.

2. Submit a declaration jointly to reduce education costs

Married students can deduct education expenses on their taxes, but you must file a joint return to do so. The tax credits you may be able to claim in this case are the American Opportunity Tax Credit and the Lifetime Learning Credit. The AOTC allows you to deduct up to $2500 of your educational expenses. The Lifetime Learning Credit is worth 20% of your first $10 in education expenses, up to a maximum of $000. To qualify for these credits, the couple's total income on the return must not exceed $2000 per year.

3. Use tax breaks for high medical expenses.

You can also deduct medical expenses from your taxes. You can claim deduction for medical expenses that exceed 7,5% of your income. To do this, save copies of your receipts for these expenses. The following expenses can be deducted from taxes: visits to the doctor, hospital stays, treatment programs prescribed by the doctor, glasses prescribed by the doctor, and medications.

4. Check out the Marriage Penalty information.

You can pay a “marriage fine” if you file a declaration together, and if you and your spouse earn about the same amount of income, especially if your earnings are high and you have children. A fine is the result of your total income obligating you to pay a higher tax rate.

5. Study tax credits for child and child care and use them

Parents with dependent children may be eligible for a child tax credit. The child tax credit for 2018 is 2000 dollars per child per year. The income threshold at which the child's tax rebate begins to gradually decline is 400 000 dollars per year when you file a joint declaration and 200 000 dollars when you separately submit declarations by spouses.

A child and dependency care tax credit allows you to deduct the cost of caring for a child or a dependent. You can save a maximum of 3000 dollars per year for one dependent and up to 6000 dollars per year for two or more dependents.

6. Take advantage of opportunities to create retirement savings for parents sitting at home

As a rule, you must earn income in order to have an IRA retirement account, but filing together a tax return allows you to open an IRA spousal account, allowing parents who stay at home with the child to contribute to the retirement savings account, even if they did not make money during the year . This is one of the tax loopholes for couples. The limit of contributions as of 2019 is 6000 dollars or 7000 dollars if you are 50 years old or more.

7. Know when it is better to file declarations separately.

Despite the tax breaks that couples who file joint declarations receive, submitting declarations individually is the best option if it reduces the couple's total tax liability. This can also be useful if one of the spouses has a tax liability for which the other spouse does not want to be held liable.

8. Consider using a earned income tax rebate.

Earned income tax relief is one of the tax benefits for low-income couples. To qualify for this benefit, you must earn less than 20 950 dollars per year if you do not have children, but this amount increases with every child you have and will be 54 884 dollars if you have three or more children. You can claim this discount for previous years if you did not require it when submitting declarations for that period.

9. How Divorce Affects Taxes

Your tax situation may change if you get divorced. Divorcing couples must determine, for example, which spouse will claim a tax credit for a child, usually a parent who has main custody of the child receives it.

Alimony also affects your tax return. Alimony payments are not taxed for the spouse who pays them, but they are taxed for the spouse who receives them. Child support benefits are not taxable for both parties.

The IRS believes you are married if you were legally married on the last day of the tax year. For example, if you’ve ever tied the knot and were still married on December 31 2018 of the year, according to the IRS, you were married for the entire tax year.

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